Ceramicas of Costaragua: The Challenges of Selling to Low-Income Citizens Harvard Case Solution & Analysis

Cer mica de-Costaragua (COP) started the production of ceramic tiles in 1953. The founders were interested in creating a vertically integrated chain. In 1990, CC suffer the effects of policy, the liberalization of the economy and, on the background of the decline in sales, he decided to join the new unexplored market in the ceramic industry: low-income consumers. Lack of knowledge about the behavior of low-income consumers has been a challenge for the CC. Thus, he sought the support of social leader who knows the residents of low-income sector. A program called "Upgrading your home" has been launched and the community are actively involved. Existing community organizations were responsible for the organization and coordination of sales promoters. Two years later, the initiative was created, CC extended to other areas of the city and in other cities. Strengthening the distribution channel specific settings for the poor have led to increased demand, leading to medium-term sales projection of one million m2 of ceramic tiles per month. To achieve this goal, the reconstruction depends on the vertically integrated value chain of the Central Committee, but a new distribution channel, which was suitable for the extended sales expectations in the market. The case presents three options to achieve the most appropriate allocation of El NICA products: the first community organizations appoint the most active role in the distribution, placing them in charge of maintaining product inventory in their offices to supply the demand for the zone, the second sentence suggests that the CC be a direct distributor of the product with plant in the home consumer, to maintain the role of El NICA service centers, the company set up in the area, and the third version creates a big service centers that function as warehouses near customers. "Hide
by Roberto Gutierrez, Diane M. Trujillo, Luz E. Orozco, Marcus Thiell Source: Social Enterprise Knowledge Network 17 pages. Publication Date: September 1, 2009. Prod. #: SKE127-PDF-ENG

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